Green Investment Tax Incentives
Green Investment Tax Allowance (GITA) Project

Features for GITA Project

FEATURES

DESCRIPTION

Eligibility

  • Companies which undertakes a qualifying green technology project and complying ALL of the following criteria:-

    1. minimise the degradation of the environment or reduce greenhouse emission;

    2. promotes health and improvement of environment; and

    3. conserves the use of energy, water and/or other forms of natural resources or promote the use of renewable energy or able to recycle waste material resources.

  • Applicable for applications received by MIDA between 25 October 2013 to 31 December 2020.

  • Projects must obtain a Conditional Approval Letter from MIDA.

Rate of incentive

  • Green Investment Tax Allowance (GITA) of 100% of qualifying capital expenditure incurred on green technology project from the date of application received by MIDA until the year of assessment 2020.

  • The allowance can be offset against 70% of statutory income in the year of assessment.

  • Unutilised allowances can be carried forward until they are fully absorbed.

Interpretations

  • Qualifying capital expenditure means capital expenditure incurred by a qualifying company whereby the capital expenditure has been verified and used in Malaysia.

  • Approved Project by MIDA for the purposes of this incentive means the Project which obtained the Conditional Approval Letter from MIDA. For this purpose, GreenTech Malaysia acts as the agency to evaluate and verify the green technology technical aspect of the project based on Project Assessment Criteria.

  • Main Equipment/Assets means major components that are necessary for the performance of the project and the cost is reasonable.

  • Qualifying company means a company which is incorporated under the Companies Act, 1965 and a resident in Malaysia.

Commencement date

  • The eligibility period would be for qualifying capital expenditure incurred from the year of assessment 2013 (date on which the first qualifying capital expenditure incurred is not earlier than 25th October 2013) until the year of assessment 2020.

Other key features

  • In respect of Companies that undertakes green technology project for own consumption, such companies would be allowed to claim GITA and other incentives (e.g. reinvestment allowance or ITA) in relation to different business source/activity as long as the same equipment/asset do not qualify for multiple incentives.

  • Where a particular equipment/asset is eligible to qualify for GITA and another incentive in relation to the same business source/activity, the company may only elect only one of the incentives applicable to the same equipment/asset.

  • Companies carrying out Approved Project which is granted GITA and subsequently purchase qualifying asset (which did not from a part of the initial project cost which was approved as GITA Project) would be able to qualify for GITA Asset.

  • GITA and GITE for use of green technology services would be mutually exclusive.

  • Companies currently enjoying energy efficient or renewable energy incentives would be able to qualify for the GITA Asset provided that there would be additional investment and it is not in respect of the same asset.

  • Companies granted energy efficient or renewable energy incentives would be able to elect for GITA Asset provided the company has not claimed the investment tax allowance on the approved energy efficient or renewable energy incentives in the tax computation.

Conditions

  • Equipment/assets in the GITA projects must be owned by the company.

  • Main equipment/assets in the GITA projects must be recognised and registered under the MyHIJAU Mark or have product certification that is recognised and accepted by GreenTech Malaysia.

  • Renewable Energy projects which have been approved with Feed-in Tariff (FiT) for solar energy by the Sustainable Energy Development Authority (SEDA) are not eligible for the incentive.

  • For green building or green data centre projects, the companies must be awarded with green building certificates from locally developed rating tool/certification body approved by GreenTech Malaysia.

  • For green building projects only, consumable (fixture & fitting) costs are eligible to be included in the qualifying capital expenditure. These costs will be determined by the rating tool/certification body and verified by GreenTech Malaysia.

  • All building materials and consumable (fixture & fittings) in the green building projects must be registered under the MyHIJAU Mark that have been verified by GreenTech Malaysia and listed under the MyHIJAU Directory.

  • GreenTech Malaysia will conduct annual verification for the following year of assessment until the tax allowances are fully absorbed. Annual verification fee will be charged to the company.

List of Qualifying Projects

NO.

SECTOR/ AREA

ACTIVITIES

1

Renewable Energy

Commercial and industrial business entities which undertake generation of energy using renewable energy resources such as :

  • Biomass

  • Biogas

  • Mini Hydro

  • Geothermal

  • Solar power

Note: Projects which have been approved with Feed-in Tariff (FiT) for solar by the Sustainable Energy Development Authority (SEDA) are not eligible for the incentive.

2

Energy Efficiency

Companies investing in energy efficiency equipment or technologies and invest in energy saving equipment.

3

Green Building

Building owners of the commercial/industrial building that have been awarded green building certificates from locally developed rating tool/certification body approved by the Government.

4

Green Data Centre

Companies that purchased any energy efficient product or solution for data centre which have been awarded green building certificates from locally developed rating tool/certification body approved by the Government.

5

Waste Management

Companies which undertake/invest in waste recycling or waste recovery or waste treatment and additional activities such as composting or store or collection or disposal.

Schematics of the Application Process

PROCESS

DESCRIPTION

  • Applicant must check the qualifying project with MIDA or GreenTech Malaysia.

  • Applicant submits an application to MIDA with the MIDA GT/JA form (Refer to website at www.mida.gov.my).

  • MIDA will request further information for uncompleted application.

  • MIDA process and evaluate the application based on the available information related to green technology project as provided by the Applicant.

  • MIDA prepare an Evaluation Report to be presented during the National Committee on Investment (NCI).

  • MIDA present the Evaluation Report during NCI for approval. If approved, a Conditional Letter will be issued. If not approved, MIDA will issue a Rejection Letter to the Applicant.

  • MIDA issue the Conditional Letter to the successful Applicant.

  • Applicant submits the certified true copy of application form (MIDA GT/JA), the Conditional Letter and supporting documents to GreenTech Malaysia for project validation.

  • GreenTech Malaysia receive the application form with the Conditional Letter and supporting documents from MIDA. Processing fee (refer to item 3.2.2, page 7) must be received upfront by MGTC via online banking, cash deposit or bank draft.

  • GreenTech Malaysia screen all the documents and information for technical evaluation. If the information or supporting documents provided are incomplete, the Applicant will be notified via email. The Applicant needs to respond within fourteen (14) days from the date of such notification.

  • The approval of the application shall be subjected to GreenTech Malaysia’s successful evaluation. If approved, a Validation Letter will be issued. If not approved, GreenTech Malaysia will notify the Applicant with a Notification Letter.

  • GreenTech Malaysia issue the Validation Letter to the successful Applicant.

  • Applicant submits tax form to IRB together with the Validation Letter from GreenTech Malaysia for tax claim or declaration.

  • GreenTech Malaysia will conduct annual verification for the following year of assessment until the tax allowances are fully absorbed.

  • Annual verification fee will be charged to the Applicant (refer to page 10).

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